Accessible Version
Where’s the Money Going? The Importance of Accounting for Rent Payments in Measuring a Household’s Financial Obligations Accessible Data
Figure 1: Debt-only payment-to-income ratio (PIR) understates overall required payments
Median Proportion
| Year | Rent+Debt PIR | Debt-Only PIR |
|---|---|---|
| 1995 | 0.25 | 0.10 |
| 1998 | 0.25 | 0.11 |
| 2001 | 0.23 | 0.11 |
| 2004 | 0.24 | 0.12 |
| 2007 | 0.24 | 0.13 |
| 2010 | 0.24 | 0.12 |
| 2013 | 0.23 | 0.10 |
| 2016 | 0.22 | 0.10 |
Description: This figure plots medians for two distinct measures of PIRs using the SCF from 1995 through 2016. Debt-only PIR is defined in Bricker et al. (2017) and is the ratio of mortgage debt, revolving consumer debt, and non-revolving consumer debt to income. The broader measure (“Rent+Debt PIR”) also includes auto lease and housing rent payments.
Figure 2: The percent of families with high PIRs has declined since the financial crisis
Percent of All Households Over 40% PIR
| Year | Rent+Debt PIR | Debt-Only PIR |
|---|---|---|
| 1995 | 28.38 | 8.69 |
| 1998 | 28.38 | 10.08 |
| 2001 | 24.19 | 8.84 |
| 2004 | 23.38 | 9.37 |
| 2007 | 23.91 | 11.36 |
| 2010 | 23.77 | 10.40 |
| 2013 | 22.72 | 8.23 |
| 2016 | 20.27 | 7.02 |
Description: This figure plots the percentage of households with PIRs exceeding 40 percent and shows that, in 2016, those percentages were lower than in any survey since 1995.
Figure 3: Measured by rent-inclusive PIRs, higher-income households have lower required payments now than during the financial crisis, but lower-income households face higher required payments
Change in Rent-Inclusive PIR Since 2007, by Income Percentile (Percentage Points)
| Year | Bottom 50 | 50th-90th | Top 10 |
|---|---|---|---|
| 2010 | 0.18 | -0.50 | -0.47 |
| 2013 | 0.93 | -2.37 | -1.79 |
| 2016 | 0.44 | -3.48 | -2.39 |
Description: This figure plots the cumulative percentage point change, since 2007, in rent-inclusive PIRs for three usual-income percentile groups: below-median (black, left three bars), the 50th-90th percentiles (dark red, middle three bars), and the top 10 percent (light red, right three bars).
Figure 4: Rent-inclusive PIRs are significantly higher than debt-only PIRs for families with incomes below the median level
Median PIRs for Below-Median Income Households
| Year | Rent+Debt PIR | Debt-Only PIR |
|---|---|---|
| 1995 | 0.35 | 0.02 |
| 1998 | 0.35 | 0.03 |
| 2001 | 0.32 | 0.03 |
| 2004 | 0.31 | 0.06 |
| 2007 | 0.29 | 0.04 |
| 2010 | 0.30 | 0.03 |
| 2013 | 0.30 | 0.02 |
| 2016 | 0.30 | 0.03 |
Description: This figure plots debt-only and rent-inclusive PIRs for families with below-median usual income.
Figure 5: The homeownership rate for lower-income households has declined markedly since the financial crisis
Median PIRs for Below-Median Income Households
| Year | Bottom 50 | 50th-90th | Top 10 |
|---|---|---|---|
| 1995 | 50.52 | 75.74 | 91.48 |
| 1998 | 51.84 | 77.69 | 92.46 |
| 2001 | 51.95 | 80.88 | 93.50 |
| 2004 | 53.62 | 82.08 | 94.09 |
| 2007 | 52.88 | 82.40 | 92.34 |
| 2010 | 51.50 | 80.83 | 92.04 |
| 2013 | 49.15 | 78.07 | 93.49 |
| 2016 | 46.93 | 77.77 | 91.43 |
Figure 6: Below-median income households are paying a larger share of their incomes on housing since the financial crisis, while higher-income households are paying less.
Median Housing PIRs, by Income Percentile
| Year | Bottom 50 | 50th-90th | Top 10 |
|---|---|---|---|
| 1995 | 0.25 | 0.14 | 0.08 |
| 1998 | 0.26 | 0.14 | 0.09 |
| 2001 | 0.23 | 0.13 | 0.08 |
| 2004 | 0.22 | 0.14 | 0.08 |
| 2007 | 0.21 | 0.14 | 0.08 |
| 2010 | 0.23 | 0.15 | 0.08 |
| 2013 | 0.23 | 0.13 | 0.07 |
| 2016 | 0.23 | 0.12 | 0.07 |